Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 to the late 1930s, marked by a dramatic decline in industrial output, mass unemployment, and widespread poverty. It significantly influenced the political landscape, leading to changes in government policies and economic theories as nations grappled with its profound social and economic consequences.

5 Must Know Facts For Your Next Test

1. The Great Depression originated with the Stock Market Crash of October 1929, which wiped out millions of investors and severely disrupted the economy.
2. Unemployment rates soared during the Great Depression, reaching as high as 25% in the United States at its peak, leaving millions without jobs or income.
3. The global nature of the Great Depression meant that economies around the world were affected, leading to declines in international trade and investment.
4. Countries responded to the Great Depression in various ways, with some adopting protectionist policies that further deepened economic isolation and recession.
5. The economic struggles during this period led to significant social unrest, including protests, strikes, and a rise in political extremism in many nations.

Review Questions

• How did the Great Depression affect global economies and lead to significant changes in government policies?
  • The Great Depression had a profound impact on global economies as countries faced massive unemployment and economic contraction. In response, many governments adopted interventionist policies, moving away from laissez-faire economics towards more active roles in managing their economies. This shift led to increased government spending on public works and social programs aimed at economic recovery.
• Evaluate the effectiveness of the New Deal in addressing the challenges posed by the Great Depression.
  • The New Deal implemented by Franklin D. Roosevelt aimed to provide immediate relief and long-term recovery from the Great Depression. While it succeeded in reducing unemployment and restoring public confidence through various programs like Social Security and infrastructure projects, critics argue it did not fully resolve the economic crisis. The New Deal's legacy continues to influence American social policy and economic thought.
• Analyze how the Great Depression influenced anti-colonial movements and shaped the path toward independence for various nations.
  • The Great Depression created economic hardships that intensified dissatisfaction with colonial rule in many parts of the world. As colonial powers faced their own economic struggles, they were less able to maintain control over their colonies. This led to increased demands for independence and strengthened anti-colonial movements as colonized peoples sought self-determination amidst global uncertainty, ultimately reshaping international relations in the mid-20th century.

Related terms

Stock Market Crash of 1929: A major stock market collapse in the United States that marked the beginning of the Great Depression, characterized by a rapid decline in stock prices and loss of investor confidence.

New Deal: A series of programs and policies implemented by U.S. President Franklin D. Roosevelt in response to the Great Depression, aimed at economic recovery and social reform.

Dust Bowl: A severe drought in the 1930s that exacerbated the economic hardships of the Great Depression, particularly in the agricultural sector, leading to massive crop failures and displacement of farming families.